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La Poste absorbed by French state bank

La Poste is being set on a firmly French trajectory. Not to focus on mail and internet retail logistics in Paris, rather, La Poste is being transformed in a huge financial conglomerate, the purpose of which appears to be sell insurance policies and bank accounts to rural France.

It can be hard for those beyond continental Europe to understand, however state-owned mail monopolies in Europe often have large financial service businesses that have grown out of post offices roles as public savings institutions.

Some have shed this role. Deutsche Post DHL sold its stake in ‘Post-Bank’ several years ago and Royal Mail shunted off its savings operations to the newly created independent Post Office. In southern Europe the model is still popular.

France not only is putting its face against privatisation of La Poste, it is trying to turn it into an even larger conglomerate. La Poste will merge with CNP Assurances, via state-owned bank La Caisse des Dépôts et Consignations (CDC). CDC will hand over its 41% stake in CNP Assurances for a stake in La Poste. La Banque Postal will be merged with CNP Assurances.

The logic underlying this move appears to be driven by the need to re-position La Poste in the face of falling mail volumes. The news agency Reuters quotes the French Finance minister Bruno Le Maire as commenting that “there is an absolute necessity to reinvent La Poste’s business.”

However, La Poste already has an impressive portfolio of express and parcel businesses grouped under the ‘GeoPost’ brand, notably DPD which operates across Europe. Why it is necessary to bolt a huge financial services organisation onto the side of this already large company is unclear. To listen to Mr Le Maire, it seems to offer the opportunity to bury La Poste’s mail losses. It could also give it the power to expand out of France by acquisition.

To contrast Royal Mail’s strategy, the UK company – now wholly privately owned, has been extending its focus this week on the parcel sector worldwide by buying a Canadian parcel company. It announced on Monday that it had bought Dicom Canada from a private equity company for £213m (€236m). Royal Mail described its strategy as “to grow through targeted and focused acquisitions to capture higher growth segments outside Europe.” Quite different to La Poste.

Source: Transport Intelligence, September 4, 2018

Author: Thomas Cullen

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